As the popularity of short-term rentals (STRs) continues to rise in Orange County, residents find themselves caught between the allure of additional income and the growing concerns over quality of life. Defined as rentals lasting fewer than 30 days, STRs have become a focal point of contention within communities, raising questions about their impact on local infrastructure and resident satisfaction.

A recent investigation by the 2024-2025 Orange County Grand Jury highlights the complexities surrounding STRs. While some residents argue these rentals disrupt neighborhoods and burden city resources with increased code enforcement, the Grand Jury’s findings reveal a more nuanced reality. Notably, cities experiencing significant growth in STRs do not consistently report a corresponding spike in complaints.

The report underscores that effective management strategies are within reach. Some cities have successfully implemented measures to address issues, suggesting that there is much to learn from their approaches. Conversely, those that have banned STRs often find themselves in a frustrating cycle of enforcement, akin to a game of “whack-a-mole,” where shutting down one unpermitted rental only leads to the emergence of another.

One alarming trend noted in the investigation is the leniency shown by many Code Enforcement (CE) departments. Fines for STR violations are rarely pursued, and the collection of the Transient Occupancy Tax (TOT) on unreported STR income remains sporadic. Some cities rely on what they call the “honor system,” trusting STR owners to accurately report and remit their taxes.

Contrary to popular belief, the Grand Jury found no clear evidence that STRs are undermining affordable housing in the cities they studied. The report goes on to suggest several best practices for city councils and planning departments, advocating for revisions to STR ordinances and the use of third-party digital tools to enhance code enforcement and improve data tracking for TOT collection.

Orange County’s status as a premier international destination—boasting attractions like Disneyland, Knott’s Berry Farm, and its picturesque coastline—has a long history of vacation rentals, dating back to the 1920s. However, the advent of online booking agencies (OBAs) has transformed the STR landscape, making it easier than ever for property owners to market their rentals to a global audience. This surge in visibility has led to growing tensions between STR operators and local residents who may view these rentals as a nuisance.

The heated discourse surrounding STRs is not limited to individual complaints; it reflects broader social tensions within the community. Some cities have opted for outright bans, while others impose strict limits or no limits at all, leading to a patchwork of regulations across Orange County.

The Grand Jury’s study focuses on the thirty-four cities in the county, particularly emphasizing areas with the highest concentrations of STRs as well as those that have chosen to implement bans. In its examination, the Grand Jury thoroughly investigated STR permits and the effectiveness of existing bans before compiling a list of strategies aimed at improving the quality of life for residents while accommodating the needs of business owners.

STR operators typically must secure a business license, register for a permit, submit reports, and pass inspections to operate legally, all while adhering to strict timelines for complaint resolution. With numerous OBAs like Airbnb and VRBO facilitating rentals, properties may have multiple listings, making enforcement of policies significantly more complex.

As the debate over STRs continues, it’s clear that Orange County is at a crossroads. Balancing the interests of residents who seek peace with those of operators hoping to capitalize on their properties will require thoughtful dialogue and effective policy implementation. The lessons drawn from the Grand Jury’s investigation may be key to shaping a sustainable future for all.